Analysis and criticism of America's most prominent public intellectual and champion of Keynesian economics. I am part of the Austrian School of Economics, and I critique Krugman's writings from that perspective.

This is not likely to happen in the United States, which at the moment seems hell-bent on descending into the abyss of socialism. Once some states begin seceding from the new American fascialistic state, however, there will be opportunities to restore healthcare freedom within them.

I presume that Amity Shlaes is already working on her Lincoln assessment, The Even More Forgotten Man.

First, Tom DiLorenzo, who wrote the article that so offended Krugman, DOES make clear his use of "fascialism," writing:

Some time ago I invented the phrase "fascialism" to describe the American system of political economy. Fascialism means an economy is part fascist, part socialist. Economic fascism has nothing to do with dictatorship, militarism, or bizarre racial theories. Fascism is a brand of socialism that was the economic system of Germany and Italy in the early 20th century. It was characterized by private enterprise, but private enterprise that was comprehensively regulated and regimented by the state, ostensibly "in the public interest" (as arbitrarily defined by the state).

Socialism started out meaning government ownership of the means of production, but it came to mean egalitarianism promoted by "progressive" taxation and the institutions of the welfare state, as F.A. Hayek stated in the preface to the 1976 edition of The Road to Serfdom. The problems of the American healthcare system are caused entirely by the fact that the government subjects the system to massive interventions, some of which are fascist in nature, while others are socialist.

Second, what is Krugman really trying to say? He is trying to go in the backdoor to smear Rep. Paul with the following syllogism:

Therefore, Ron Paul is a racist and anything he says about the Fed's behavior should be ignored.

Don't kid yourselves about what Krugman is doing. The guy has smeared Ron Paul in the past and now that Rep. Paul is taking aim at the Fed -- something that is in his right to do -- Krugman is going to unleash all barrels on him. And, I am sure that his employer, the NY Slimes, will follow suit.

Ron Paul does not understand the monetary of the US. Someone should explain to him that we left the gold standard decades ago, government debt issuance is a monetary operation, not a fiscal one, and public deficits are necessary for private savings when the external balance is negative. Someone should explain to Ron Paul basic accounting, and force him to reprint a retraction to End the Fed. And if Ron Paul had any chutzpah, he would have invited Randall Wray or Warren Mosler to his little pow wow to destroy the economy instead of a bunch people that will agree with him and kiss up.

Ron Paul does not deserve to be smeared, but he deserves to be criticized for his lack of understanding of the monetary system of the US.

*Krugman refers to to economic ideas that refuse to die as zombie fallacies*Krugman talks about politicians who use these these zombie fallacies*Therefore, Krugman is actually calling these people ZOMBIES!!*This is a smear

Wasn't it Desolation Jones who cited "A Discussion with FVH" from 1975 quoting Hayek supporting more inflation to combat deflation?

Well, I spent $20 and bought the little booklet (the original price tag say $1.50). I'm not impressed. The quick recovery of 1920-1921 suggests that prices and wages aren't really "sticky". There's never an excuse for inflation. Without inflation, you'd never have deflation.

Hayek seems most worried that deflation might result in a Nazi putsch or something. I don't see it as an "economics" argument, but a practical politics argument. We'd better inflate or else economic illiterate barbarians might kill us.

@ AP Lerner -Ron Paul does understand the US monetary system, and he understands that it is NOT working because we left the gold standard.Someone should explain basic accounting to you, that when you spend more than you have now, you end up paying more later.

Now, if my boss ALWAYS comes in sober, have I directly slandered him? Of course not. I didn't SAY that he was drunk after all. I said that he was sober!

We are not idiots, and neither is Krugman. Any middle schooler (even in our public school system) can easily parse out his meaning from what he wrote. The literal denotations of the words he chose never add up to "DiLorenzo is a racist". But his communicated meaning is precisely that DiLorenzo holds political-historical views that render his unrelated economic views not worth taking seriously.

This doesn't even need to be pointed out, in that no reasonable person needs to have it explained to them. But for those here who somehow think that they are getting away with such despicable smearing behavior, it is important that someone at least make it clear that no, you're not. We KNOW what you are doing. Now go back to your usual habitations and congratulate yourselves on being the only sane people in the room. Don't worry about the train that is coming, and that will sweep your ideology away with it. It's a fantasy-come-true for you to go down with the ship, arguing to the bitter-end that just because the hull, cabin, and deck are flooded with water and the ship is tilted at a rather-vertical angle to the water, that still doesn't mean that we're actually sinking.

Have fun with that. There will always be a few folks like you, no matter what else happens. But your ability to control the debate is done.

If criticism of Lincoln's horrid "Union" government, and support for the Confederacy, at least to the extent of their independence, is the hallmark of a "racist", then maybe being a "racist" at least according to Lincolnphiles like Krugman, may not even be the worst thing in the world to be!

It certainly wasn't the Confederacy, still less "racists", whatever their sins elsewhere, that set the precedents for the suspension of Habeas Corpus, the mass exile and arrest of domestic critics, 'perpetual war for perpetual peace' and foisting the beginnings of Central Banking, the infamy of the Income tax,and the "war-on-drugs" starting with Harrison Narcotics act, and later the nightmare of Prohibition, on the rest of us since 1913!

It wasn't the Confederacy after all, or even their sympathizers or revivalists in the XX century, who pursued appalling economic, educational, military, and fiscal policies which turned the USSA-the United Socialist States of America--into a latter day replica of imperial Rome c.450AD!

"Progressive" thinkers and writers like Krugman are far worse than "racists" here!

The KKK and their ilk were no comedy show, to be sure; but for REAL destruction, modern 'liberals' and social democrats take home the Blue Ribbons every time!

PEACE AND FREEDOM!!David K. Meller

PS-While there has to be something wrong with someone who would hate another person only because of his genetic heritage, I would trust a country's future to a "racist" over the likes of Krugman--or Keynes--anytime!DKM

No matter the subject matter, Krugman simply cannot deal directly with libertarian arguments. He smears the Austrian position by smearing the anti-Lincoln position. He has failed to address either with facts or argument.

That is why this blog is called "Krugman in Wonderland". It is not a smear to explore and examine the kind of person Krugman really is.

Anderson, you deny smearing Krugman by saying that Krugman endorses Madoff and fleecing billions of dollars of people.

Your defense:

"Hmmm. I looked up the Bernie Madoff post, which was tongue-in-cheek for Krugman's support of Social Security which, like Madoff's schemes, is based upon the Ponzi Pyramid."

Krugman also obviously said "Death Panel" in a tongue-in-cheek way and even explained exactly what he meant in the interview (along with a blog post devoted to it). Yet in your head, KRUGMAN SUPPORTS DEATH PANELS AND WANTS TO KILL GRANDMA!

Even Krugman knows that without prices, scarce services will necessarily be the subject of bureaucratic decree. This is just another baseless topic for clueless statists to fuss about.

You should purchase the Quebec film "Barbarian Invasions" where we see the wonders of bureaucratic medicine. The rich son of a dying left wing professor takes him to Vermont for a scan unavailable in Canuckistan and then basically bribes/buys him his own floor in the hospital.

Bob, discussing economics is great. I can't remember the last time Anderson wrote about economics though. Anderson likes to talk about Krugman's rhetoric with more rhetoric of his own. There's zero economic analysis here. If you want to talk about economics, I suggest you go elsewhere. This blog is about discussing rhetoric. You're in the wrong place!

Discussing economics--the science of human action and human choice--is very difficult when an "economist" in question--Paul Krugman--insists that, for starters, one can borrow one's way out of debt, that government (or central bank) issue of fiat 'money", NOT the utility of coins used for exchange, gives value to money, that and that spending--rather than saving--creates prosperity and opportunity!

If Mr. Anderson doesn't discuss economics here as much as some people would like him to, take it up with Dr. Krugman!He only gets in our way every chance he gets, whether it is with his irresponsible advocacy of Obamacare, egregious cap-and-trade tax proposals, the Global Warming hoax, Ron Paul's efforts at exposing the Fed or anything else!

This site is about him, his ignorance, and the political foolishness he advocates; HE never discusses economics, only his Keynsian fantasies cited above, and what Anderson does here, is to simply acknowledge these dismaying facts on this website!

I voted for Ron Paul in the fla primary but i don't ALWAYS blindly support him-I've done my homework. I like the audit & more transparency but think if you look carefully at history returning to the gold standard looks be a net negative for American power. If we just stopped the unfunded liabilities game Created mostly be 2 wars & the Bush Medicare expansion, most of our finance issues would disappear. If our policy favored new industry and ideas over oligarchical monopolistic businesses, jobs would appear. Instead we're busy screaming about ideology and the other side being wrong or evil.

If you want to read something scary, read the majority of the others’ comments. These utter imbeciles haven’t the slightest knowledge of Austrian theory nor Lincoln and Civil War history. But they KNOW everything.

The bad news is that those morons are incurable and will never be reached. The good news is that they will never be able to mount any type of credible intellectual opposition to the forces of truth, honor, morality and civilization (us).

Hey Bob ever occur to you that you're the narcissistic moron that knows everything? Do you ever get bored not listening to any other points of view other than some guy that died nearly a century ago? Did it ever occur to you to blame yourself for your miserable existence?

Let me guess, you're some kind of single, lonely guy, living somewhere in the mid-west or some small town that never became a big town. You had a crush on the prom queen who blew you off and then ran off with an investment banker that in high school could not string two sentances together but now makes millions. You're likely a lawyer or some how involved with the legal system. You hate your job because your co-workers are intellectually inferior to you. You can't figure why you can't get ahead in life while others pass you by, so you blame the bogey man, ahem, the government since it is evil and out to get honest, hard working guys like you. The mere existence of someone as successful, rich, looked up to, and liberal as Krugman pains you to the core because you want to be someone just as rich, just as successful, and just as respected, and equally conservative, but that damn government just keeps sneaking up on you to snatch what little you have.

Bob, if your life is so miserable, stop posting on blogs so much, and try working a little harder. Maybe if you worked as hard at your day job as you do utterly disrespecting people you do not know, you may make something of your life.

Those of you complaining about the inclusion of some politics in these types of discussions fail to acknowledge that the only place “pure” economics takes place is in the academic classroom. And that’s only if the professor is intellectually honest. In the real world politics and economics are conjoined.

Hey Anonymous,If you want to personally attack Bob I suppose that’s your prerogative. But you should at least have courage use your name and not ANONYMOUS. Thanks for an empty contribution to the forum.

@AnonymousYour little hit piece on Bob was way out of bounds. You probably don’t know anything about him. The man believes in liberty and economic freedom unlike statists like Krugman and other Keynesian Morons that can be a cheerleader for the government and get published in the NYT for. Sad thing is other statists lap up what he writes and regurgitate his talking points in political discussions across the country, further confusing others who are unfortunate enough to hear this claptrap. Of course when they encounter an articulate libertarian grounded in the Austrian school, they tend to shit their pants., Bob is right, the statists have nothing. Ever. Arguing with statists is like watching a 10 year old girl throw a football with her left hand. Pathetic .

"Johnny Reb economics"? That would imply a support for the economic system of chattel slavery. Heck, no one does that. Now if he meant Johnny Reb politics, then he implies that anyone who support the idea of secession supports slavery, which is nonsense. Aside from actually reading DiLorenzo"s writing, does Krugman equate secession with slaver? Has every secession movement in the world supported slavery? The basic principle behind secession is that they no longer wish to be governed by their respective government, so many possible reasons exist for supporting secession. Krugman is sloppy here for a reason.

FYI, Lila Rajiva is the author of “The Language of Empire: Abu Ghraib and the American Media”.

http://tinyurl.com/4urh7wj

I had followed her blog since 2009 and recently purchased her book. I’ve read about 30 pages and it sits on my nightstand as the next book I plan to read. I see many similarities between the selling of the Iraq war (and all US interventions) with the selling of The Fed and the smearing of Fed opponents.

DiLorenzo, Ron Paul's witness, was sharply criticized in the hearing for his whacky views on Abraham Lincoln, secession, etc. not on epistemological views. Here's the Washington Post summary:

"Rep. Lacy Clay (D-Mo.) directly took on DiLorenzo for his membership in the League of the South, an organization that has been designated by the Southern Poverty Law Center as a "neo-Confederate" hate group advocating for Southern secession.

Clay then rattled off a list of some of DiLorenzo's articles, including "More Lies about the Civil War," "In Defense of Sedition," and "The First Dictator-President," which examines "how Lincoln's myth has corrupted America."

"After reviewing your work and the so-called methods you employ, I still cannot understand you being invited to testify today on the unemployment crisis, but I do know that I have no questions for you," Clay concluded.

Clearly, you Lincoln lovers must love and be personally responsible for Abe’s support for the Corwin Amendment:

“Corwin Amendment was a proposed amendment to the United States Constitution passed by the United States Congress on March 2, 1861. Ohio Representative Thomas Corwin offered the amendment during the closing days of the Second Session of the 36th Congress in the form of House (Joint) Resolution No. 80. The proposed amendment would have forbidden attempts to subsequently amend the Constitution to empower the Congress to "abolish or interfere" with the "domestic institutions" of the states, including "persons held to labor or service" (a reference to slavery).

Abraham Lincoln, in his first inaugural address, supported the Corwin Amendment: "[H]olding such a provision to now be implied Constitutional law, I have no objection to its being made express and irrevocable." Just weeks prior to the outbreak of the Civil War, Lincoln penned a letter to each governor asking for them to support the Corwin Amendment.”

http://en.wikipedia.org/wiki/Corwin_Amendment

I wonder why we never heard of that back in 2nd grade.

And, of course, you must love and support the efforts of Abe “Ship ‘em back” Lincoln to ship the freed blacks out of the country ASAP, right up until the end of his life:

Colonization after Emancipation: Lincoln and the Movement for Black Resettlement explores the previously unknown truth about Lincoln’s attitude toward colonization. Scholars Phillip W. Magness and Sebastian N. Page combed through extensive archival materials, finding evidence, particularly within British Colonial and Foreign Office documents, which exposes what history has neglected to reveal—that Lincoln continued to pursue colonization for close to a year after emancipation.

What's funny is after it was politely pointed out that DiLorenzo had no business testifying at this hearing, Pauls response was:

"Paul said he was unfamiliar with that side of DiLorenzo's work."

and proceeded to say

"I think that that's typical of people who can't compete on ideas, they have to try to discredit the individual,"

and then he proceeded to resort to childish name calling by calling Bernanke cocky. He would fit in on this blog with that kind of narrow minded, childish, baseless, and nonsensical response. Enjoy your 5 minutes of fame Dr. Paul. You have no ideas; just ignorance

I am a bystander; I do not know much economics, Keynesian of Austrian. I am like a patient suffering from a rare cancer. I have consulted two doctors. "Ivy League" doctor is arrogant and condescending; he enjoys obfuscation and talking down to me. He says I need disfiguring surgery and takes offense at my questions. "Cow College" doctor welcomes my questions and explains his recommendation and his reasoning clearly. He says chemotherapy is just as effective as disfiguring surgery. I would rather die than go with "Ivy League" doctor.I would rather my country die than follow Krugman and his ilk. -Richard Carpenter

“Amid all the brouhaha about how the downfall of Hosni Mubarak would provide the oh-so-scary Muslim Brotherhood with an opening to create an Islamic theocracy along Iranian lines, take a look at what’s happening in US-occupied Iraq:

The Iraqi Ministry of Education has banned theatre and music classes in Baghdad’s Fine Arts Institute, and ordered the removal of statues showcased at the entrance of the institute without explaining the move, but some of the students mull religious reasons as the real motive. ‘Students have also fears that the ban will extend to include other arts such as photography, directing, sculpting, and drawing.’”

http://tinyurl.com/6dz2drp

Thus, as a result of our “liberation” of Iraq, it is becoming an Islamic theocracy. The usual neo-con smear of Iraq war opponents was that they loved Saddam. Criticize the new Iraqi Islamic theocracy and you love Saddam? This same form of smear is being employed against DiLorenzo and Ron Paul. It’s pathetic.

Just to throw some fuel on the fire. The term Civil War is a misnomer for our incident here in the States. A civil war is two sides fighting over control of a central government. The South didn’t want to control Washington DC, they wanted to leave. Thus it was a war of succession.

>Paul appeared to be winging it as he sat behind the nameplate labeled "Mr. Paul, chairman." When it came time to give his opening statement, he took off his reading glasses and ad-libbed. "We probably have pumped in $4 trillion" to the economy, he complained. "I imagine we could've given everybody 60-, 70-, maybe $100,000 - I haven't done the calculations - just give 'em the money and we would've been better off."

Jesus Christ, Ron Paul just said we would be better off if the fed just printed and literally gave $100,000 to every single person in the US. Talk about hyperinflation. This further proves that Ron Paul does not understand how open market operations work nor how how to distinguish between the money supply, excess reserves, and the monetary base.

I did read some of Woolsey's stuff in favor of "the printing money" by "The Ben Bernank". He was all over Bob Murphy's blog last week. He did manage a substanceless insult of me as an infantile Rothbardian or something, but I didn't see anything from him on acting man, subjective value or economic calculation. No one ever wants to go there because they will lose.

I've quickly read those Woolsey posts. He doesn't mention basic Austrian CONCEPTS, but does examine the ABCT. I think he's totally wrong on the ABCT, and I will try to respond to that in the next few days.

About Me

I teach economics at Frostburg State University in Frostburg, Maryland. We are located on the Allegheny Plateau, and we have cool summers and tough winters.
I am the single father of five children, four of them adopted from overseas and I have two grandchildren. My family and I are members of Faith Presbyterian Church (PCA).